Moneyland (2018) is a revealing – and worrying – examination of the lengths to which the rich and corrupt will go in order to keep their money safe. From Nevadan trusts and Angolan oil fields to Russian assassins and tropical islands, this book tracks dirty money, no matter where it goes.
Oliver Bullough is an award-winning non-fiction writer from Wales whose work has focused extensively on Russia and Eastern Europe. His writing has appeared in The New York Times and The Guardian, and on the BBC. He is also the author of The Last Man in Russia and Let Our Fame Be Great.
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Start free trialMoneyland (2018) is a revealing – and worrying – examination of the lengths to which the rich and corrupt will go in order to keep their money safe. From Nevadan trusts and Angolan oil fields to Russian assassins and tropical islands, this book tracks dirty money, no matter where it goes.
Prior to World War II, global finance was relatively unregulated. Money flowed rapidly among nations; it destabilized currencies and caused poverty and widespread social unrest, both factors in the outbreak of the war.
Years later, with victory in sight, the Allied powers turned their attention to preventing this situation from arising again. To this end, they decided that the value of national currencies would no longer be determined by market fluctuations. Instead, they would be tied to the US dollar, the value of which was pegged to US gold reserves, a stabilizing force.
The Allies also agreed that in the future, money would only be allowed to travel overseas in the form of long-term investments. Risky, short-term international investments were strictly prohibited. It was a bold and effective move – but it wasn't to last.
The key message here is: Postwar efforts to stabilize markets quickly failed.
These new international financial regulations worked well for a time. But before long, bankers started exploiting loopholes in the new laws. For example, although the US government oversaw American banks and regulated their loans to ensure stability, it couldn’t interfere with dollars that were stored overseas. As a result, London bankers could do what they liked with the dollars they controlled – the British government simply didn’t care.
This uprooted currency became known as eurodollars, and it could flow among countries just like in the old days. This was the first blow to the stable postwar framework.
Not long afterward, eurodollars were joined by an even more daring financial innovation, known as eurobonds.
These new bonds were different from investments of the past. Through clever planning and artful negotiation with European authorities, bankers gave this new type of investment a whole host of attractive features. For a start, the profits earned on eurobonds were tax-free – but that’s not all.
In the past, institutions that issued bonds had to record the personal details of those buying them. Eurobonds did away with this restriction. In fact, eurobonds weren't tied to individuals at all; issuing institutions simply gave buyers a coupon to be redeemed when the loan’s term had elapsed. This made them enormously appealing to individuals seeking to hide wealth.
This situation was a far cry from the ideals that the Allies had advanced at the end of World War II. Instead of reining in the world of global finance, their new regulations inadvertently ushered in a new, more aggressive market – and money went global as never before.